Germany and five other countries demand cuts to EU budget

Germany and five other countries are calling for a reduction in the EU budget

Negotiations on the EU’s multiannual budget for 2028–2034 have intensified after Germany and five other countries demanded a substantial cut of almost €2 trillion to the package proposed by the European Commission.

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The countries are also calling for a shift in spending towards defence, competitiveness and innovation, according to the Financial Times.

Germany, the Netherlands, Sweden, Denmark, Austria and Finland have stated that they are not prepared to support the current draft EU budget. According to the Financial Times, these six countries, which together account for around 40 per cent of the EU budget’s funding, are demanding that it be cut by ‘hundreds of billions of euros’.

This concerns the EU’s next Multiannual Financial Framework (MFF), which is set to cover the period from 2028 to 2034. The European Commission has proposed a budget of nearly €2 trillion, which is approximately 60 per cent higher than the current budget for 2021–2027.

The position of the six countries is not merely to reduce the overall level of spending. They are proposing to shift the budget’s priorities, channelling more funds into defence, security, competitiveness and innovation, whilst curtailing traditional areas of funding, including agriculture and regional development, the FT emphasises.

Two approaches to the future EU budget

The positions of the Member States diverge significantly. A group of countries led by Germany advocates a leaner budget and a reallocation of funds in favour of new strategic priorities. At the same time, a number of states, including Spain and Italy, are keen to maintain funding for agriculture and regional policy, the publication notes.

A further point of contention concerns the sources of funding. The European Commission is proposing to introduce new EU own resources – including additional revenue from the emissions trading scheme, the carbon border adjustment mechanism, electronic waste, tobacco excise duties and large companies.

According to the Commission’s estimates, these sources could generate around €58.5 billion a year.

Germany and its allies oppose further joint EU borrowing as a means of plugging the funding shortfall. Berlin also considers it necessary to cut spending across the board, rather than just in specific programmes.

Adoption of the multiannual financial framework requires a unanimous decision by EU member states. Following a political agreement, the Council of the EU must unanimously adopt the relevant regulation, after which the consent of the European Parliament is required.

European leaders hope to reach a political agreement by the end of 2026 so that the necessary legislation can be adopted in 2027 and the new budget can come into force from January 2028.

This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.

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